SOC Telemed, Inc.
Q1 2021 Earnings Call Transcript

Published: 15 May 2021

Operator:

Good afternoon and welcome to SOC Telemed’s First Quarter 2021 Earnings Conference Call and Webcast. All participants will be in a listen-only mode. Please note this event is being recorded. Leading today’s call are John Kalix, Chief Executive Officer and Chris Knibb, Chief Financial Officer. Please note that the company will be discussing certain non-GAAP financial measures that they believe are important in evaluating performance. Details on the relationship between these non-GAAP measures to the most comparable GAAP-measure and reconciliation thereof can be found on the press release that is posted on the Investor Relations page of the company’s website.
John Kalix:

Thank you, operator and welcome, everyone on the call. Before we get into the results, I’d like to provide a reminder as to the space in which we play and why the differentiation is so important as the leading and largest dedicated acute care telemedicine provider. We operate in a very different space than those who primarily focus on lower acuity, patient-initiated consumer telemedicine. With that comes the challenges and the opportunities actually tied to managing complex workflows and requires a level of expertise and experience to provide the highest quality care possible. A recent example where the acute care and direct-to-consumer spaces differentiate came from Q1 telehealth patient usage. As reported by FAIR Health telehealth usage, among individuals with private insurance, fell 16% month over month, the first decline since September. Conversely, as we operate in a higher acuity space, with a need for patient care delivered in hospitals are stable, we actually saw significant increase in patient consoles volume in Q1 across multiple service lines led by psychiatry, which is what we will cover in more detail here as we move forward. It’s just one example of how the acute care telemedicine space differs from telemedicine at large and would continue to focus on the space moving forward. So, we had a great start to the year and I’m pleased to be here today to provide an update to the first quarter. Revenue came in at $14.8 million inclusive of 5 days of Access Physicians contribution. This is consistent with prior year Q1 2020 results. And as a reminder, given the timing of the COVID pandemic, there is simply less impact around Q1 2020 patients on utilization as compared to Q1 2021. Therefore, we are pleased with the results given that environment. Our bookings, which I will elaborate a little bit more later here, were $8.5 million for the combined company ahead of plan for the quarter. On the call today, I am going to share more detail on our recent acquisition of Access Physicians, high level results and additional industry trends that we observe in Q1.
Chris Knibb:

Thank you, John and thanks to those of you who have joined us today to review our financial results. Jumping right in for the first quarter, the combined business generated $8.5 million of new annual recurring revenue bookings, providing a strong start to the year. Given the complexity of our space and the nature of the sales cycle, we continue to expect bookings results to vary between quarters. We are also taking this opportunity to adjust our definition of bookings to reflect the expected annual recurring revenue for new contracts signed during the period, which creates a single definition for bookings between legacy SOC and legacy Access Physicians. Taking a closer look at our bookings during the quarter, cross selling remained a key focus in our SOC customer base, and Greenfield opportunities represented the bulk of Access Physicians contributions. Additionally, our sales pipeline grew throughout the first quarter tied to high interest from hospitals looking to adopt acute care telemedicine and current customers looking to add new service lines even prior to the acquisition announcement. Post acquisition we believe Access Physicians’ additional specialties, and the previously discussed minimal customer overlap, provide significant opportunity to continue cross sell within the combined customer base, and to address the broader markets needs for our expanded breadth of services. Reported revenue was $14.8 million in the first quarter, consistent with Q1 2020. As a reminder, given the timing of the COVID-19 pandemic hitting late Q1 last year, there was limited impact around Q1 2020 hospital volume utilization. This was different in Q1 2021, where we didn’t start to see patient volumes recover until late in the quarter. Therefore, we are pleased with the current quarter’s results given the environment. The Access Physicians transaction closed on March 26. Hence, their results were consolidated for just five days in the quarter and contributed approximately $364,000 to this quarter’s revenue. On a pro forma combined basis, we generated $22.8 million in revenue for the full quarter. Revenue for our legacy SOC business was driven by modest recovery in core consult volumes in the second half of the quarter, and continued utilization growth of our Telemed IQ platform. For the quarter 94,000 consults were conducted on our platform a 40% year-over-year increase. As our platform early customers continue to increase their utilization. 31,000 of the total consults were what we define as core consults, those that utilize our SOC Telemed physicians. For those core consults, we saw volatile utilization trends during the first half of the quarter, which stabilized and then increased over the second half of the quarter, with particularly psychiatry as John previously mentioned. Access Physicians had 28,000 core consults for the full quarter which represented strong growth year-over-year for that business. On a pro forma combined basis for the full quarter. The average revenue per core consult was $356, reflecting the lower per consult average from Access Physicians inpatient consults, which generally take less time, resulting in a lower revenue per consult. Now turning to our non-GAAP financials in the first quarter, adjusted gross margin was 42% compared to 34% in the first quarter of 2020. On a pro forma combined basis, our adjusted gross margin was approximately 40% in Q1. The improvement in adjusted gross margin is the result of closer alignment of scheduled physician hours with the volatile consult demand experienced during the pandemic. In March of 2020, we were unable to reduce physicians work schedules as quickly as demand began to fall off in the beginning of the pandemic, which resulted in the lower margin position. Operating expenses excluding depreciation and amortization, integration costs and stock based compensation was $10.9 million, an increase of 42% compared to a year ago, reflecting our increasing investments in our go to market functions and the costs associated with being a public company. Reflecting those investments our first quarter adjusted EBITDA was a loss of $4.6 million compared to a loss of $2.7 million in the prior year quarter. On a pro forma basis, adjusted EBITDA in the first quarter would have been a loss of approximately $5.2 million. We ended the first quarter with $32.5 million in cash. Additionally, as previously discussed, we established a $125 million 5-year credit facility, of which we have used $85 million as well as a $13.5 million subordinated note, both related to the Access Physicians transaction. Finally, while we have seen an uptick in utilization, we are still in the early stages of the COVID-19 recovery. So, we are taking a conservative approach in maintaining our previously stated guidance. This is consistent with our underlying model, which assumes overall utilization will return to pre-COVID-19 levels in mid Q3 2021. The full year 2021, we continue to expect pro forma combined revenue in the range of $107 million to $113 million, with Access Physicians contributing approximately 30% to 35%. And on a GAAP or reported revenue basis, we expect revenue to be in the range of $97 million to $103 million. We expect adjusted gross margins to be in the range of 42% to 45% and adjusted EBITDA loss to be in the range of $15 million to $19 million. While there continues to be some pressure on utilization of our core services related to COVID-19, we are seeing a number of promising trends. First, the vaccination distribution has transitioned outside of the hospital, meaning hospital executives can turn their attention back to more normal operational concerns, including projects tied to acute care telemedicine. Second, it’s important to emphasize that the pandemic has become a tailwind for our segment of the industry, as it has driven rapid acceptance of telemedicine as a solution to provide efficient, time sensitive and high quality care. Finally, we are seeing the desire for strategic consolidation of telemedicine vendors in the acute care space within hospitals and health systems, which positions SOC very well given our experience, our scale and established leadership position. Finally, I know many of you are aware of the recent focus by the SEC around SPAC warrants accounting. We are happy to share that this issue has not impacted us because our original accounting was consistent with the SEC’s guidance. To wrap up, I want to thank the combined SOC Telemed and Access Physicians teams for their hard work as we integrate into a single combined business. We have a lot of runway ahead of us and I look forward to keeping you updated as we progress going forward. With that, we would be happy to take questions. Operator?
Operator:

We will now begin the question-and-answer session. And the first question comes from Ryan Daniels with William Blair. Please go ahead.
John Kalix:

Hey, Ryan. John Kalix and Chris here.
Ryan Daniels:

Can you guys hear me now?
John Kalix:

We can.
Chris Knibb:

Now we can. Yes.
Ryan Daniels:

Sorry about that. Thanks for taking the question and congrats on the strong start to the year. Quick housekeeping issue, can you go into a little bit more detail on the change in higher calculating bookings. In particular, I am curious if that includes just the fixed recurring fees or if that’s now also inclusive of an assumption of the utilization based fees on top of that.
John Kalix:

Yes, Ryan. So previously, we on a standalone basis, our bookings included some of the upfront fees as well as technically get amortized over the estimated customer life. So that number, we are just taking the estimated 12 month period for now. And we are making a better assumption around what we think variable fees might be. We work really closely with the customers when we set their minimums and we get some info and looking at their history where we think they might have overages. So, to the extent that those overages are anticipated to come into play, those would be in the model now.
Ryan Daniels:

Okay. Thank you for that. And then, John more strategically, I know, it’s still very early, and you acknowledge that but given the expanded service offering, I am curious. You did allude to this what the conversations are more with the larger healthcare systems? Are they seeing your organization as a potential entity that could be someone to work with enterprise wide or is it just too early to tell if that could actually come to fruition?
John Kalix:

You are right, it’s a great question. And we are seeing much more large and strategic discussions taking place. And actually think about it in two different elements, even just commercially with our newer commercial team that we have ramped up at the back part of last year, the discussion of saying, hey, where can you need help from neurology or psychiatry, or pulmonology and ICU? It would be much more specific, obviously, with just those specialties. In this broader discussion, we start with the strategic question of walk me through as you are thinking through a system, what are your three or four largest specialty needs. Let’s just talk about more in general what the areas that you need help with, maybe not at your largest flagship, maybe it’s your more rural areas, maybe it’s about the fact that again, it’s not just about trying to find the shortage of specialists, but in some areas just too consolidated in a particular geography for that same hospital customer. So the combination and the simplification, let’s pick one of those specialties, put all of your specialists that you currently have in your network on Telemed IQ. And then we can where you have peak demands, where you have gaps in clinical coverage, where you are not able to recruit, or where you don’t have the specialists very much at all. And we can literally do nearly all of it for you that create new service lines, create new marketing opportunity within their areas. And most importantly, keep patients as we talk about that network integrity element, keep patients within their own space. So for us, any solutions resulting in an appointment of Telemed IQ, once in with those customers becomes easier to add other specialties. So you start with one, you start with the peak, most critical that they are trying to consider. And then you talk about a layering effect. And actually, what we are seeing is that layering effect is coming in what we mentioned between 2019 and 2020, growing from 1.7 to 1.9. The conversations now are not just about what’s the one specialty, it’s, hey, here is the plan. Let’s start with one. And then we will quickly move to the second and the third specialty. And it is much more about just the single location. So, our conversations have pivoted rapidly from even what I would call singles and doubles just a single site or one or two sites within a region to a health system saying this is the next element we have to tackle. Its complex, I know to do this right, I would need this customer consult center, I need workflow assurance, I need all my clinicians credentialed and privileged. I have to have something that activates a position of one physician for gets the jump on that we don’t have a specialty critical acute care scenario, waiting for that specialist. So, what is my workflow assurance to ensure there is always someone watching over that as that second safety mechanism? And so the conversations have pivoted pretty dramatically in the first quarter.
Ryan Daniels:

Yes. That’s great. That’s very helpful. And then final question for me and you may have highlighted this before discussing the transaction. But can you talk a little bit about the sales investments and customer relationship or service investments you intend to make now given the big opportunity ahead of you. I think a lot of that was, frankly, probably made in advance knowing that you were going to do M&A. So, maybe it’s already established, and you don’t need to rent the sales as much as might be the case to kind of expand into the larger client base. But just any color there would be great as well? Thanks, guys.
John Kalix:

Great question. Yes, your initial statement is correct. We do this very much in a proactive fashion and format. So, we knew as we – let me even start back the moment we went public, we knew one of the strategies of becoming a public company was to become a lightning rod of activity. And a number of different groups reached out to us or we were able to reach out to have conversations from a merger and acquisition standpoint. Access Physicians to us became the clear symbol of how we wanted to look at merger and acquisition. Again, they had 10 years in telemedicine space. We share this same vision, mission kind of culture element within the space and there was that strategic element about how do we move forward. But we also meet with a lot of other companies and even meet with Access Physicians that I am in of large commercial team wasn’t there. And so we knew any investment we made in the commercial team would help them get up and running, to be ready for an expanded portfolio. So, there was strategy to the timing, how quickly we move the commercial organization hiring, from spreading it out in 2021, to really doing it much more upfront in preparation. And I will say the other side, we still continue to have the hiring the account management space. As we grow, we want to have really high touch with our customers. And that’s had to be done locally, as well as at an IBM level nationally. And our customers are expecting that within the systems, because there are so many differences. But also the fact that you can imagine we are not just talking about one or two specialties. Now we are talking nearly a dozen specialties. We need individuals to have the time to really stand back, talk to the different groups, different heads of departments, to the CMOs on this broader implementation that can take place, given our broader graph. So, beyond the investments in the sales resources, and then the expanded clinical service lines, coupled with Telemed IQ, it really enabled us to say yes, with just about any opportunity that hits our table. And that’s what we are ready for now. But we are going to continue to expand our account management team, knowing what the growth that we had in bookings in the first quarter, and knowing what we are working through our pipeline currently.
Ryan Daniels:

Thanks again and congrats on the industry recognition of weights. Thank you.
John Kalix:

I appreciate that.
Operator:

Your next question comes from Sean Dodge with RBC Capital Markets. Please go ahead.
Thomas Keller:

Hey, good afternoon. This is Thomas Keller on for Sean. Thanks for taking the questions. Just want to go back to the volume recovery real quick. You mentioned turning to pre-COVID levels in mid Q3. Can you give us a sense of where you stand right now relative to that?
John Kalix:

Yes. We are tracking in line with our plan. So our plans had as we came through the third wave that started to stabilize and pick up in the middle of the first quarter towards the end of the first quarter. We have a reasonably straight line expected to go up back to sort of pre-COVID levels mid Q3, as we stated. We were really happily surprised to see how our March volumes, frankly, were up 17% over January. So, the volumes are starting to come back and look really promising. And we are in line with our overall plan that we laid out. We did our model originally. So, things are still on track.
Thomas Keller:

Okay, it’s helpful. Thanks. And then I guess you mentioned more before about, I guess on Access Physician side shifting some of those Docs from 1099 to W-2 employees? Have you guys started any of that process yet or do you have any early goals around that you can share with us?
John Kalix:

Now, Tom, it’s a great question. We really look at that as a process over time. One of the elements about scale. And one of the elements about talking and meeting with our customers is ensuring that we meet the customer demands first and their needs. And we mentioned out the first part of pulling the organizations together, both commercially. And our clinical teams are already meeting and getting to know each other, thinking through how we help each other with future coverage given again, the pipeline that we have been talking about. The element for us, when we moved our clinical team from 1099 to W-2, it’s where you really have consistent scale and demand. But you need breadth and able to do that. So, as we grow each of these additional service lines, we will absolutely move individuals from 1099 to W-2. We see that as a slow march, Thomas, but it’s a slow march for purposeful design. The last thing we want to do remember, these are very critical patients on the other side. This is not a coffin cold. This is not pinkeye. This is not a dermatology appointment. And we have to ensure that we are there on the minutes’ notice if needed, or within the timeframe that we commit to our customers for these specialties. So, we are going to do a very slow design to process on that. It’s already considered in how we think about margin moving forward in the future, but we are going to be cautious on that overall. We are also going to be teaching those clinicians right on how to utilize the Telemed IQ platform and pull them in to the broader SOC team. So, so far the discussions have been great. The leadership teams are getting along wonderfully. And it’s a testament to what Dr. Chris Gallagher has done at Access Physicians with his leadership team and Jason Hallock, our CMO with our clinician leadership team. Things have been going off better than expected.
Thomas Keller:

Okay, that’s very helpful color. Thanks, guys.
John Kalix:

Appreciate, Thomas.
Operator:

The next question comes from Jailendra Singh with Credit Suisse. Please go ahead.
Unidentified Analyst:

Hey, this is Adam on for Jailendra today. Thanks for taking the question. I wanted to follow-up on a question that was already asked. But so I guess in the guidance, you indicated an expectation of return to pre-COVID levels in the middle of 3Q. Just curious whether that assumption taking new accounts, any pent-up demand or how we should think about the run-rate of utilization after any pent-up demand clears within your customer base?
Chris Knibb:

Yes. We don’t really view it as pent-up demand, per se although we have had a little bit stronger recovery in psych. That curve was a little bit steeper. But we don’t view it at all as pent-up demand. We see it as confidence building as the vaccination rolls out across the nation, that people are less afraid to go back to the ED and people’s needs are not fully being met through having interactions at home or otherwise. So we are seeing people coming back into the hospital on a more normal course regular basis. So there is always potential for upside, I would say maybe in psych, but we do see it as a ratable stable uptick over the balance of the year.
Unidentified Analyst:

Got it. That’s helpful. And then just a follow-up, does the acquisition of Access Physicians decelerate the rollouts and other standalone Telemed IQ platform in anyway or how should we be thinking about that aspect of the business moving forward with, obviously, a lot of focus on the integration of Access Physicians? And then just the backdrop of the competitive landscape with other just standalone platforms out there providing telehealth or videoconferencing services? Thanks.
Chris Knibb:

With the acquisition in no way distorts our rollout of the platform and then frankly every customer of legacy SOC is operating on the platform today. And then over the long-term, from a very customer-centric perspective, we will ultimately migrate the Access Physician customers on to the platform as well and we are continuing to see strong interest from hospitals and physicians groups to buy platform only services from us. So I don’t see any deferral of our rollouts of TMIQ across any time horizon.
John Kalix:

Yes, Adam. I agree with Chris answers. No, they are right. Again, once Telemed IQ is in, we can turn on a number of new specialties regardless of who really owns a provider network. So whether it’s the hospital’s own clinicians and providers, whether it’s another physician group that they have outsourced that work to hospitalists or ER, etcetera. And so that element of looking at it as a tool that really allows them a Swiss Army Knife of options across numerous specialties is actually brought in our individuals that sell telemedicine IQ and our expanded sales team into many more co-deals, because the conversation becomes just much more natural. We are not trying to displace specialists without hospital currently we are trying to help augment where there is a shortage or where you would have to over hire to ensure that you are hitting the peak capacity.
Unidentified Analyst:

Got it. Very helpful. Thank you.
Operator:

The next question comes from Bill Sutherland with The Benchmark Company. Please go ahead.
Bill Sutherland:

Thank you. Chris, John, good evening.
John Kalix:

Hi, Bill.
Bill Sutherland:

Telemed IQ, do have a revenue number for them in the quarter and for that product, I mean and how did that factor into bookings?
Chris Knibb:

Well, Bill, the bookings, each contract for Telemed IQ is a smaller dollar amount on average than a full services booking. So – and we haven’t broken up those bookings between the different service lines. And I can tell you the Telemed IQ is continuing to grow, we had – let’s see, it grew – the utilization on the platform grew over 100% year-over-year and about in the low-teens on a sequential basis. But I don’t think we are giving out the revenue number per se. It’s not significant enough for our – to meet our – we need to break it out from an SOC perspective yet.
Bill Sutherland:

Well, it’s an even smaller percentage now that you are combined with Access Physicians, of course. I want to understand…
John Kalix:

The other part of that too to keep in mind is once we are – once we activate with the provider organization, right, outside of SOC’s own clinicians, right, the expansion takes place there, because they adopted this as their solution. And again, we really see now, we are really seeing where everyone who has tried a simple Zoom based platform or tried to do it on a platform that didn’t have the technical capability and the workflow assurance has learned their hard lessons where they – it worked well enough as a Band-Aid approach in the initial onset, because everyone was in sort of the push on the COVID element just trying to be urgent. But now the thoughtfulness of the platform and we have mentioned before, we have already working with several large physician groups and we are now working with a few others as well, the ability for us once they start it’s one and then it’s a dozen, then it’s two dozen. And we have the team focused on working with those organizations have their own sales teams to activate against their own clinical group. So, this element is once we increase scale, it increases workflow, you have increased scale, you have increased workflow complexity, so large groups, lots of volume, complexity goes up, you need the ability for something to manage that complexity and we are fitting into a nice mix there.
Bill Sutherland:

Right, great. Chris, just help – if you could on bookings, the way you defined it now, which was $8.5 million in the quarter, what would that have been in 1Q ‘20 using that approach?
Chris Knibb:

Bill, last year, I did not go back and redo what that would have been, but for the legacy business, the math is not wildly different, because when we did bookings previously, it included all of the upfront fees that in reality get amortized over the life of the contract. So, now that has a lower effect in our math, because we are just taking 12 months worth of that. And then to the extent that we believe that there will be overages, we are adding that back and forth has somewhat of a neutralizing effect.
Bill Sutherland:

Yes, I can see that. Also it – so it would compare, I mean, the 3 – I think is $3.9 million for the fourth quarter. So, it compares pretty directly to that or is there some Access Physician?
Chris Knibb:

Yes. Our $8.5 million is for the combined business, because all of the benefit of that booking will come in turn into revenue as those new customers get on-boarded in the future.
Bill Sutherland:

Is it kind of proportional with the size of the two businesses, just curious?
Chris Knibb:

Actually, we had – there was a little bit more waiting towards Access Physicians ironically, but ours was on trend with our historical trends.
Bill Sutherland:

Okay. And then just one last one for me just so I understand kind of if I look at the comparison, the way you talked about your core consults, I think you said 31,000 or was – is that correct?
Chris Knibb:

Yes, we had 31,000 in the quarter, which total quarter-to-quarter sequentially was about the same. It was about a 2% lift sequentially. However, in the first quarter, on our average core counsels per day, when you compare March to January, we were up 17% in March over January. So, the quarter itself is a bit of an anomaly, particularly when you look at full quarter, but we did see the recovery really start to set in as we had modeled thankfully. So yes, we do see a comeback. In the acute care setting, where we are uniquely positioned we believe is coming back online.
Bill Sutherland:

And sorry, one more, core revenue per – I mean, the revenue per core consult was wide again?
Chris Knibb:

So, we gave that number on a pro forma basis, which includes the Access Physician councils and its $356 for the quarter, so trying to sort of help reset that number.
Bill Sutherland:

So, just so I can think about it versus 4Q, do you have your standalone?
Chris Knibb:

Yes, last year, at the end of the year, we provided the full year number, which is $430.
Bill Sutherland:

Right.
Chris Knibb:

So, yes. And the Access Physicians has – I shouldn’t say they – they are part of us now, but the in-patient councils generally take less time, so…
Bill Sutherland:

No, I understand. Yes.
Chris Knibb:

On average, we fit on a bit.
Bill Sutherland:

But you guys are running kind of like the 2020 number, is that what you are saying?
Chris Knibb:

Yes.
Bill Sutherland:

Okay. Thanks, guys. Thanks, John.
Chris Knibb:

Yes. Welcome.
Operator:

The next question comes from David Larsen with BTIG. Please go ahead.
David Larsen:

Hi. Can you please talk about your cross-selling expectations like into your core base, what areas within Access Physicians would you expect to see the highest demand coming from like what different specialties please? And over what time period, would you expect to see meaningful cross-sell? Thanks very much.
John Kalix:

So, the cross-sell activity actually happened quite quickly for me. We had – it was coming in three elements, one was simply inbound. We had already built up a pretty significant marketing presence online. And instantly on the day of the announcement, made sure we updated all the company web pages. We made sure we went back into we’ve mentioned before that we – you layout crumbs and make sure that you followed those out for people that are looking for telemedicine in the past. So, that was the first avenue incoming. The second avenue was obviously talking with the sales teams and the ability for them even with customers they are talking to about a neurology need that hadn’t yet closed the ability to go back to those same customers, because you have that captured presence to have that discussion. The third element was the larger discussions which either our client services team will activate against obviously quickly, because they meet with our current customers quite regularly as part of their job responsibilities, I am bringing forward the metrics to our customers to be able to utilize for efficiency and clinical quality measures. So, we were able to activate all three of those groups into the teams of look for initial opportunities with our customers. So that part, we started nearly immediately out into the marketplace. The interesting thing is you would expect certain specialties and I will give two examples, you expect certain specialties to “falloff after COVID.” One of those being like infectious disease, you would think infectious disease, because of COVID would start to taper down as COVID exits, but that’s actually not the case. What ended up happening was hospitals who had not thought through the need of infectious disease, who now have that specialty available to them, see the need, the value and the opportunity for their own patients in their own communities by having access for their infectious disease doctor. So, that’s an example of a specialty that has continued to grow, because it’s a specialty with dramatic shortage and a specialized need. MFN is the exact same thing. There are less than 1,000 MFN specialists in the country and well more than the 1,000 hospitals that need access to MFN clinicians, maternal-fetal medicine specialists. And we are fortunate to have some great ones on team SOC. And that’s the element that we see just the uptick coming, because the interest is there. You can imagine during COVID and pre-COVID actually teleStroke was known. That was where acute care telemedicine was essentially founded and became a basis of. I don’t think everyone clearly understood until the technology was understood. And I want to start having the more direct-to-consumer experiences at home and trusted the interaction. Knowing that Telemed IQ already had been built in for 20 specialties, the ability to say, can I do this for nephrology? I mean, I could do this for cardiology. I didn’t think I could even think about for infectious disease. And so that conversation we are bringing the need when people are having the enlightenment of this can work within their institutions that you don’t – it doesn’t matter about zip code address or location. And as we mentioned on a prior call, half of our business is rural by site and location, but half is urban. So, it is across all state, regardless of location and regardless of specialty. So our element now and I am not – I don’t think the deal speed will pickup anymore than it always has, because hospitals have to work to the same processes that they always have. The element of finding that opportunity activating our clinical, our new commercial organization and then individuals like Dr. Gallagher joining our direct leadership team being able to leverage as a cardiologist that discussion on what he has done himself with telemedicine in that space just brings a really unique addition to the team that has been great on the early days here.
David Larsen:

Great. That’s very helpful. Thank you. And then with regards to the bookings, I think that we know what the 1H ‘20 bookings were, I think they were $5.7 million I would guess that the 1Q 20 bookings were probably around $2.9 million. Is that right? And then, what was the growth rate in bookings on a year-over-year basis? I mean, it seems like it was actually very healthy. If we – like just any color there would be great? Thanks.
Chris Knibb:

Yes, I think your number is right on the bookings, $2.9 million, I believe this is the right number for Q1 last year. I actually have that here and that is correct. And so the growth was tremendous. The $8.5 million, just if you look at the $8.5 million, just sequentially Q4 to Q1, it’s nearly 120% growth sequentially. So, on a year-over-year basis, it’s almost nearly 200% growth, it’s 193% year-over-year. So, just the interest in the – as John said, we intentionally went out to do M&A that was going to expand our breadth of services, because we were hearing from the market that there is a need for a wider breadth of services and that hospitals are looking for a single partner to help them throughout their system or their hospital, because it’s difficult for them to manage multiple, various systems and processes and contracts and things of that nature. So we are seeing a huge interest in what we now have to offer. And even prior to the transaction being announced, our pipeline was up 30% during the quarter just on our legacy business alone. So, it does take time, as John mentioned, for us to go out and sell and negotiate contracts and implement. But as I look down the road, the long-term future is very bright.
David Larsen:

Great. Of the $8.5 million, how much was Access Physician? How much was legacy SOC Telemed, was it half and half?
Chris Knibb:

The legacy SOC – not quite half and half, it was a little bit more skewed towards Access because of their broader set of services that they were offering, which is exactly why we were interested in the business.
David Larsen:

Okay. So, it looks like the core legacy business bookings were up at least 30%, probably closer to 40% or so, on a year-over-year basis?
Chris Knibb:

Yes. Core bookings were – core bookings were up, I don’t have that percent in front of me, but yes, we were definitely up.
David Larsen:

Great. Thanks very much. Congrats on a good quarter.
Chris Knibb:

Thank you. Appreciate it.
Operator:

As we have no further questions, this concludes our question-and-answer session. I would now like to turn the conference back over to management for any closing remarks.
John Kalix:

Look, we are right at the top of the hour, so I will make this short. Thank you for everyone for listening in. It is a giant thank you to everyone within our Access Physicians and SOC Telemed larger family now. It’s been a tremendous coming together. We look forward to just an exciting future. I think we all see what we can do together in acute care telemedicine and we are excited to bring you those results in the future. So, with that, have a great night everyone.
Operator:

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

SOC Telemed, Inc. Q1 2021 Earnings Call Transcript

Other SOC Telemed, Inc. earnings call transcripts:

SOC Telemed, Inc.
Q1 2021 Earnings Call Transcript